I consider myself pretty savi when it comes to finances but also a bit wary of a situation that seems too good to be true so can anyone on here tell me if i'm missing something......... I have a Barclaycard with very little on it but a limit of 10k....I've got a letter from them this morning offering to transfer cash into my Current A/C for a one off fee of 1.9%, Interest free until Oct 2014. I have a 1/2/3 Current AC with Santander that offers interest of 3% on balances up to 20k, which at present tends to cost me approx 15 quid a month in overdraft fees. Should i be transferring as much as possible from my Barclaycard for 6 months, thus saving me fees and making me interest ?? It just seems too good to be true and wondering what any of our financial gurus out there think before i take the plunge.
Yeah that was my thinking.... But as long as I'm disciplined and pay it back with plenty of time (which I'm 100% certain I will be) and don't use it for anything, I still can't see the catch to be honest.
Let me understand this properly.....you use your credit card to transfer up to £10k into your current account, at a cost of £190. So you presumably clear your overdraft, but you have to pay off whatever you borrow on the card at whatever APR they charge (a staggering 18.9% from a brief search). That's where they make their money. You can do the maths, but it only makes sense if you can pay off what you borrow on the card really quickly. Credit cards are usually a crap way to borrow money mate. They aren't offering you up to £10k at 1.9%, they are loaning you that for a one off fee, then charging you APR until you pay it off, I think.
I have no credit cards and I advise everyone on here to never own one No one is ever savy if they think credit cards aren't there to make money for a evil that frankly needs to die
Banks don't normally do stuff for you unless there's something in it for them. I'd just read the small print, usually there's something hidden in there.
I don't either, I have a building society account with a good overdraft and the biggest fee i be ever paid is about 10 pence interest to them. Having said that, its hard for families to live without one.
No mate, the 1.9% charged by Barclaycard is a one off fee on the amount borrowed (£190 per £10k) then it's INTEREST FREE until OCT 2014. Anyway....I think I've spotted the flaw in my cunning plan......The interest paid by Santander is 3% AER, so that's only .25% a month (I think), so therefore I'd be losing money. Is that right ?
I have 3. All are paid off in full every month, so I get the points/goodies whatever and don't pay interest. Makes me more than £500 a year on the John Lewis MasterCard which we use for all household expenses, petrol, eating out etc etc. I use another one only for the internet and keep a largely unused Amex in my wallet for no good reason, but sometimes useful when traveling. But in principle you are spot on, if I couldn't pay them off before interest cuts in I would cut them up. There are far more cost effective ways to borrow cash if you need to, and that certainly doesn't mean Wonga.
Yeah, I think so...to break even you would need to find another account that would pay you enough in interest, after tax, to pay off the 1.9% while you kept your current account in the black to avoid any more charges...not sure thats possible at the moment. Even ISAs are only offering 2.5% max tax free, and you only get the benefit of them after 5 years or so, not great if you need access to the cash. Mind you, if you borrowed the full £10k, kept it in an ISA for 5 years, you'd be £1.3k minus £190 better off after 5 years.......a season ticket or two at the new place perhaps. If you pay off the £10k credit card loan before October of course. Otherwise you are screwed, I suppose they are banking on people over extending and having to pay the full APR on some of what they borrow.
Sorry to disagree Dave but not always. You can get a very good deal on 0% cards...Up to 28 months on some, and for example, if you had a big purchase...like my Holiday last year....and you know it has to be paid off before the rate changes AND you are disciplined enough to do it, then it's far better to use your cash for those 28 months for other investments, making interest in the meantime.
I'll be honest mate, my wife looks after all this stuff in our house, I've been consulting her. I just provide the capital. Though she's doing a pretty good job on that score herself at the moment. Perhaps I'm redundant.
The thing about credit cards offering cash advances, balance transfers etc. is this... When it comes to the customer making a payment, the credit card company will apply this payment firstly against any outstanding balance relating to the cash advance or balance transfer before applying it to any ordinary purchases made. In this way, you're led into thinking its interest-free for (say) 6 months, but they screw you by charging you interest on the ordinary purchases. For example, say a customer balance transfers out £5,000, then makes a £100 purchase. The credit card company relies on the customer believing the £5,000 is interest-free and therefore only paying £100. But the company applies this £100 to the £5,000 and charges the customer interest on the £100 purchase. From this point the customer is ****ed because unless he repays the entire balance he'll never repay the £100 of ordinary purchases until the £5,000 transfer is cleared. As has already been said, it's a financial con that's only worth falling for if (1) you can repay the balance in full at the end of the interest-free period, (2) you don't use that card for anything else either before or after the balance transfer and (3) the purpose for doing the transfer in the first place is worth more to you than the 1.9% cost of the money. I've done it once. I had a car on a 3-year finance lease with a bullet payment at the end. Because the mileage of the car was significantly less than I'd contracted for, there was equity in the vehicle, so I took out a separate credit card, took out the cash for the bullet payment at a cost of around 2%, then sold the jam-jar for a sum well in excess of the bullet payment. After I'd repaid the credit card bill I made around £3,000.
Used to have credit and yes disapline is required . Remember I gave away all my worth in the most liberating moment if my life 8/9 years ago and started afresh from nothing. I understand that's not for everyone but the freedom that comes with that and the lessons of life that come with it are priceless IMO Friends of mime haven't moved much their houses are worth a lot more and yet they struggle with life in some sort of juggling trap Mrs DT is wealthy and never has had a credit card just simply lucky to have been dealt the born in London card In France to have a credit card usually means a yearly fee Sorry but money is the riot of a lot of evil ... We need it of course but credit card scams are marketed for what other reason but to make more debt Why add to it? Get the most you can for your skills and enjoy life and give when you can Imagine what would happen if people just held onto their money or withdrew what they had? ... Any idea how scary that is? I owe 33,000 Euros today but have that in reverse so I am also a hypocrite using the banks money to buy my dream house Credit cards if left unchecked will ruin your day to day life IMO reject them IMO
Sorry to correct you Uber but that's not now correct on most (if not all) credit cards. This did indeed happen up to a few years ago until the government of the time directed the card companies to make all payments received be allocated first to the part of the debt that accrues the most interest. This was done to alieviete debt and curb the profits made by the credit card companies.
Fair enough, Staines. I've not had cause to contemplate such things of late. I'm now wondering how to get in the front of the query the next time DT decides to throw his cash around...
0% balance transfers can be very useful...........Tesco offer one over 29 months. But, the golden rules are..........never use the card for anything; try to repay the balance before the interest free period is up or else, make sure you transfer the balance to another interest free card.
Staines...all a bit complecated for me but...i played the credit card game a few years ago. Go for the 0% intrest cards (usually 6 months) and transfer everything. hen the card arrives just cut it up and place in the bin, then transfer your balances. In 6 months time the intrest will kick in so just do the same again. You can usually get about 3-4 diffrent cards before the companies catch on to you you & refuse. Hopefully by then you have paid off the majority of the balance. Hope that helps.
Very well said. Interest/Usury is a great evil and curse on our world. http://en.wikipedia.org/wiki/Riba
